Technology and investment company DigitalX (ASX: DCC) has consolidated its strong market performance so far this year by launching a blockchain-powered RegTech application aimed at financial exchange participants.
Hailed as the “first step” in its strategy to utilise blockchain to develop scalable products within the so-called regulatory technology market, or RegTech for short, DigitalX launched its new software solution alongside an early adopter program offering a six-month discount.
In a statement to the market this morning, DigitalX announced the launch of Drawbridge, its first RegTech initiative, and said the application addresses the need for “improved administration of securities dealing policies” by listed entities.
Furthermore, the app clarifies which compliance rules various companies must face when managing insider trading risks and the orderly acquisition and disposal of securities by existing staff.
According to the company, there are over 10,000 change-in-director interest notices lodged annually on the Australian Securities Exchange (ASX) alone “with the process often prone to high profile mistakes to the detriment of shareholders, caused in part by human error or a lack of understanding of when it is appropriate or inappropriate to trade securities in the entity”.
By launching Drawbridge, DigitalX hopes its new software will become a go-to portal for listed companies to digitise trading restrictions under their policy and automate necessary approvals for employee and director trading.
Having seen the product go live, DigitalX confirmed it will be focusing future development work on adding new features such as an employee share sale facility, training and education options, as well as real-time access to trading data.
As a public demonstration of the merits of its software, DigitalX has adopted the solution across its entire workforce.
To raise user numbers at the earliest possible stage of Drawbridge’s development, the tech company has also deployed an early adopter program to encourage first adopters to provide feedback and assist ongoing development.
Customer feedback will be used to prioritise the highest value features for inclusion in future iterations with customer onboarding set to commence in December 2020 and January 2021.
DigitalX confirmed its product launch plan is aimed at reaching corporate governance professionals of publicly listed companies with an overarching strategy focusing on customer acquisition through a mix of channel partnerships with professional bodies and services firms, as well as direct marketing to company secretaries and compliance managers.
The initial target market is the approximate 2,200 companies listed on the ASX, which are all required to have a securities trading policy as part of ASX corporate governance requirements.
Thereafter, DigitalX executive director Leigh Travers foresees opportunities for the company to tap other global exchanges following the initial launch phase on the ASX in Australia. Although, the company said no action has presently been undertaken to promote Drawbridge overseas.
“Drawbridge represents the first application in our push towards providing next-generation RegTech solutions into the market,” Mr Travers said.
“While the research and development phase was extensive over the year, the pace and quality of the development is a testament to the small team and their execution capabilities.
“Importantly, it only marks the commencement of our work in this area and our team is already focused on developing new products, utilising our blockchain skills and experience, to create a big presence in this space and create a new line of revenues for the company,” he added.